King.com, the Second-Largest Social Games Maker, Jumps Into Advertising

Developers of social games have been slow to adopt advertising, opting instead to rely on the sale of virtual goods, but that mindset has started to change.

Game makers are recognizing that advertising is a potentially lucrative way to monetize the vast majority of customers who will never be willing to pay.

Last month, I reported that Zynga is close to launching a homegrown advertising platform that it will eventually make available to third-party developers. Now, the second-largest game maker on Facebook says it is also hitting up Madison Avenue.

King.com, which is headquartered in London, plans to announce today that it has hired Charity Sabater as its senior director of ad sales. Sabater will operate out of New York City, and will have a focus on brand sales in the U.S. Prior to joining King, Sabater was the VP of East Coast sales for Gaia Online, an online gaming site.

King said that advertising revenue from its social games has increased tenfold over the past year, and now accounts for nearly 15 percent of the company’s overall revenue. During a recent quarter, Zynga’s advertising revenue accounted for slightly less — about 12 percent of its revenue — for a total of $41 million.

King said two of the primary ad units that are attracting the most interest right now include incentivized videos and something it calls “Brand as a Friend.” Incentivized videos allow a user to watch a 15- to 30-second commercial in exchange for earning an additional life in the game. King said those ads generate an average click-through rate of more than 5 percent, and a video completion rate of 85 percent. The “Brand as a Friend” campaign allows players to “friend” brands to help them unlock new content in the game.

Some of its recent ad campaigns include such brands as T-Mobile, Samsung, Procter & Gamble, Macy’s and Nestle.

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